Walt Disney Business Analysis

Background

Walt Disney, an entertainment empire started by Walt Eisner Disney and joined by his brother Roy Eisner, is s an entertainment business that enjoys financial success. However, the company also suffered the pangs of economic failure (Carillo et al., 1). The failure did not result from the organization’s management choices regarding the improvement of the company performances. Instead, the failure lies almost wholly in the management strategies and the kind of acquisitions they opted to make.  For instance their choice to acquire ABC Studios (The Walt Disney Company 6). Disney is also not attentive in having a potential back up leaders trained. Therefore, in the instance that the chairman dies or head leaves,  it takes them a long time to get a replacement. Consequently, some activities drag resulting to financial losses and lost opportunities. The strategic issue, in this case, is poor strategic management (Francoeur 2).

Strategic Analysis and Options

SWOT analysis.

Strengths

The Strengths of Walt Disney is that it has an already established worldwide fan base of their signature cartoon characters such as Mickey Mouse and Mini Mouse. The Disneyland parks in the different significant cities such as Tokyo and Paris have ensured a steady supply of a given substantial amount of cash (Francoeur 3). The organization also has fully and well-developed animation studios that set it apart and at a better position than the other animation studios. Walt Disney’s products are high quality which is one of the core values of Walt Disney. The creativity put into their products is ensured to be high through the “gong show” meeting. The meetings get the company a lot of loyal fans that readily buy Disney’s products and services (The Walt Disney Company 18).

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Weaknesses

Walt Disney’s Weaknesses are in leadership areas. Walt Disney started off with no giving of titles, just roles. Walt Eisner Disney believed that if you were important to the company, you would just know it. As the company expanded, there was the need for creation of departments and having their heads. The chairman, however, also takes the role of the president after the death of the previous president, Frank Wells. The rule has led to overburden on the part of the leader hence affecting his efficiency in his work (Carillo et al., 3). Some leaders face disbanding due to conflicts between managers of departments over finances and wanting to prove superiority. Being exorbitant in productions has been experienced a good example being productions under Joe Roth from 1994. The miscalculated risk of buying ABC also took a toll on Walt Disney’s finances (Latif et al. 274).

Opportunities

Walt Disney’s Opportunities are uniquely identified by the creators. Walt saw the need to come up with an attractive park that catered for the entertainment of the entire family and created one. Seeing the number of visitors that came to the park, they saw an opportunity in the hospitality industry and took it (Francoeur 4). Walt Disney has a record of identifying opportunities and plunging themselves in them no matter how risky. It is on these occasions that Walt Disney has thrived. Eisner also recognized the opportunity to increase their sales internationally. In ABC, they saw a chance to attract (Latif et al. 286).

Threats

The sprouting of other animation companies has proved to be a Threat to Walt Disney. The departure of significant leaders has threatened to ruin Disney’s reputation. One of the head imaginers who left Walt Disney said that the current Walt Disney does not stick to the original company’s value of creativity. He stated that it is now all about the money. Also, the increased production cost for both the animation and film sector has threatened to shake the financial industry of Walt Disney. Tarzan (1999) cost an estimated $170 million marketing and distribution cost not included. Such kind of issues affects the number of feature animations produced in a year and thus lesser profits (The Walt Disney Company 14).

Recommendations

Leaders should identify those working under them to ensure they possess qualities to lead the company in case of the manager’s absence. The leaders can then record their suggestion and keep it where it can be accessed in the event of the leader’s demise (Carillo et al., 1). Training should be provided for the identified. The company should stick to its niche and concentrate on building it.

Justification

Leader identification recommendation helps the company not to risk going under if the leader is no longer with the company because it is still seeking a suitable leader when one is within it (The Walt Disney Company 28).

The recommendation for a company to concentrate on one field helps the company reduce the risk of high chances of losses because ventures that divide their attention will lead to a clashing of agendas. For instance, the acquisition of ABC was a costly decision for Disney during buying and its operation. It did not serve what Disney was good at, animation (Latif et al. 278).

The analysis leads to this recommendation due to the overburdening of Eisner in the leadership role due to lack of a supporting leader. Moreover, the proposal is appropriate because an increase in debt ratio at Walt Disney was the caused by acquisition of ABC which did not serve the kind of Walt Disney’s fan base, and therefore the risk did not pay off (Francoeur 6).

 

Works Cited

Carillo, Carlos, Jeremy Crumley, Kendree Thieringer, & Jeffrey S. Harrison. The Walt Disney Company: A Corporate Strategy Analysis. Case Study. University of Richmond: Robins School of Business, 2012.

Francoeur, Betsy. Brand Image and Walt Disney: A Qualitative Analysis of “Magical Gatherings” Journal of Undergraduate Research, vol. 5, 2004, pp. 1-8.

Latif, Madiha, Jawwad Hassan Jaskani, Tehreem Ilyas, Irum Saeed, Kaynaat Shah & Nida Azhar. Tactful Acquisitions& merger of The Walt Disney Company improved its performance, showed by financial & industry analysis. International Journal of Accounting and Financial Reporting, vol. 4, no. 1, 2014, pp. 274-296

The Walt Disney Company. Company Profile the Walt Disney Company. 2013. Retrieved on 28th Feb 2017 from http://www.citi.columbia.edu/B8210/read26a/disney.pdf

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